Articles Posted inIntellectual Property

Texas residents may have seen reports about the white air balloons that Google has been launching above remote areas of the world to provide those areas with Internet service. Google’s Project Loon launched its first air balloons in 2013 and the company has flown them over Sri Lanka, Australia, New Zealand and Brazil. Now, a company called Space Data is claiming that Project Loon was created using stolen trade secrets.

Space Data filed a lawsuit against Alphabet Inc., the parent company of research firm Google X, in the U.S. District Court for Northern California. At the heart of the lawsuit is the claim that Google executives were granted access to Space Data’s facilities where they learned how the company’s technology worked. Although both companies signed a mutual confidentiality and non-disclosure agreement, Space Data claims that Google stole its technology and violated two of its patents.

According to the lawsuit, around 12 Google employees visited Space Data’s Arizona location in 2008. While there, the Google employees learned about the company’s altitude-controlled balloons that deliver wireless communications to remote areas. Space Data says that it engaged in extensive discussions with Google about the technology and showed Google its network operation center and balloon production line. Since the meetings, Space Data says that Google has given press conferences that suggest it has used the air balloon technology without Space Data’s permission.

Texas business owners interested in protecting their intellectual property may find it helpful to learn more about trade secrets. In general, any business information that is of value, isn’t public knowledge and is protected by measures that maintain confidentiality can be considered a trade secret. Trade secrets are partially valuable because the businesses that hold them are the only ones with the knowledge, and nearly all states have enacted some form of protection. Most states derive their trade secret laws from the Uniform Trade Secrets Act of 1970, although some have modified these terms.

Analysts say that every company maintains some trade secrets. This kind of information may include data like customer lists or information about new technologies, but it can also comprise things like processes, formulas, patterns and methods.

The Uniform Trade Secrets Act prohibits practices like misappropriation, or the unfair and improper acquisition and use of a secret. It also institutes mechanisms for damages, royalties and injunctions against violators. Committing intentional acts of misappropriation with ill intent could render a violator liable for legal fees as well as damages and royalties. Most companies rely on confidentiality agreements to provide protection, but these are often breached and result in lawsuits.

Texas sci-fi fans may have heard that CBS and Paramount have filed an amended complaint to their copyright infringement lawsuit against Axanar Productions, which is producing a fanfiction “Star Trek” film. The lawsuit was originally filed in December.

In the amended complaint, which was filed on March 11, CBS and Paramount list 57 instances of “Star Trek” copyright infringement, including similarities to characters, races and species, story settings, costume design and logos. The companies also accuse the fanfic production of stealing copyrighted dialogue, such as “beaming up” and “warp drive.” Axanar, which was created by “Star Trek” fans, raised hundreds of thousands of dollars on Kickstarter and Indiegogo to produce a fanfic “Star Trek” film. The company claims that CBS and Paramount have long allowed fans to write their own “Star Trek” stories because they are offered to other fans for free. The company claims that all the money raised for the film will go into its production and they will not turn a profit.

However, CBS and Paramount are asking the court to bar Axanar from distributing both the film and a 20-minute prequel that has already been produced. They are also seeking $150,000 for each instance of alleged copyright infringement. Axanar insists that the films serve as free commercials for “Star Trek” and do no harm to the franchise.

Companies that are seeking investment generally have better odds of receiving funding if they have protected their intellectual property. Intellectual property is either the product idea itself or any proprietary knowledge in creating or marketing the product. Businesses have many options when it comes to protecting IP such as asking for a non-disclosure agreement or assignment of IP to the company.

Businesses that want to protect their intellectual property may also want to pay attention to data security issues. Keeping information on a secured and encrypted server as opposed to a free server may prevent sensitive documents or other information from being revealed to hackers or others who may gain access to the company network. Employees and others within the company should agree to a privacy policy, and any outside partners should also be bound by it as well.

Startups should be aware that without a patent, other companies can independently develop a product or come up with an idea without consequence. Furthermore, a competitor may then be able to patent that idea and sue any other companies that infringe upon it. Therefore, companies who believe that they have an idea to create or modify an existing product need to pursue protection of their intellectual property as soon as possible.

Entrepreneurs in Texas may be pleased to learn that the United States has been selected as the country with the best environment for intellectual property. The U.S. Chamber of Commerce compares the world’s major economies on factors such as the safeguarding of trade secrets and the protection of copyrights and patents, and they produce an International IP Index every year. The 2016 index was published on Feb. 10, and Britain, Germany, France and Sweden joined the United States to round out the top five nations.

The 38 economies ranked by the Chamber of Commerce account for the overwhelming majority of the world’s production and economic output, and the business federation’s president said that passing strong intellectual property protection laws and signing several international trade agreements and treaties put America at the top of the index. Intellectual property is thought to have created about 40 million jobs and makes up more than a third of the nation’s gross domestic product.

However, the Chamber of Commerce report was not all good news for American entrepreneurs. The nation’s infringement enforcement practices were criticized, and the U.S. was ranked fifth in this area. Enforcement effectiveness is measured by determining the rate of infringement, evaluating the legal remedies available to the injured parties and assessing the authority that customs officers have to stop and inspect cargo shipments.

Entrepreneurs in Texas will likely associate protecting intellectual property with copyrights, patents and trademarks, but the contracts signed by workers and contractors can also be used to prevent the unauthorized use of formulas, designs, slogans and logos. While business owners frequently place non-compete clauses in their employment contracts to discourage workers from revealing proprietary information and trade secrets, they often fail to take similar precautions when entering into agreements with independent contractors.

Business owners who have become embroiled in protracted legal disputes with independent contractors over the ownership of work product are sometimes victims of their own assumptions. They may have taken for granted that any work performed by a contractor would become theirs once the bill had been settled, but court decisions are based on contractual provisions rather than words left unsaid.

When independent contractor agreements are not specific, judges may decide that contractors retained copyright ownership of the work they performed. Being on the wrong end of one of these decisions could be ruinous for entrepreneurs if the intellectual property concerned is a key component of their business model.

Texas residents may be familiar with the classic comedy sketch ‘Who’s On First?” that was famously performed by comedy duo Abbott and Costello. Decades after the sketch was performed in vaudeville theaters and featured in two Hollywood movies, the heirs of Abbott and Costello filed a copyright infringement lawsuit. According to the heirs, a Broadway play called ‘Hand of God” used pieces of the sketch without permission.

The Abbott and Costello case has brought up many questions about whether or not the heirs have a valid copyright. Although Universal Pictures transferred the copyright for the ‘Who’s on First?” video clips to the heirs of Abbott and Costello in 1984, the sketch was used many times before it was recorded in the 1940’s films ‘One Night in the Tropics” and ‘The Naughty Nineties.” Because the sketch was used by several different vaudeville performers including Abbott and Costello, it is not clear who the original authors were.

Even if the heirs own a valid copyright for ‘Who’s On First?,” the author of the Broadway play may have used pieces of the sketch legally. Under fair use laws, copyrighted material can be used by another person if the use is transformative and does not seek to replace the original copyrighted material. The Broadway play is not a comedy and does not usurp the market for the Abbott and Costello films.

While the hit TV show Shark Tank is entertaining, entrepreneurs in Texas can also learn a lot by watching how the ‘sharks” talk about potential investments. Often, the issue of intellectual property plays a role in the sharks’ decisions about what businesses to invest in. Entrepreneurs who have thought about IP and done things to protect their IP seem to do better in the ‘tank.”

On one episode featuring a company called xCraft, the sharks were very concerned with protecting the company’s trade secrets. A founder of xCraft had invented two distinct types of drones that the sharks were very interested in. Before all five sharks agreed to invest in the company, Shark Robert Herjavec wanted to be sure that the designs couldn’t be copied. The inventor assured him that all of his company’s designs were protected with pending patents, and the company viewed licensing their technology as ‘silly.”

Protecting intellectual property is very important when there is a high risk of an idea being copied. If a business model, product or service has a low copy risk, investors may not view patents as crucial. For example, an idea that was pitched on Shark Tank called Rent Like A Champion had a low copy risk and little need for patents because the business model involved a lot of grassroots efforts that were not likely to be copied.

Texas residents may be surprised to learn that intellectual property law dates back to 1623. That was the year that the British Parliament voted on the Statute of Monopolies, which granted the inventor of new devices and technologies sole control over their design and production. The passing centuries have seen intellectual property rights evolve to become a highly specialized and complex area of the law, and the information age has made protecting intellectual property crucial for modern companies. Infringement of these rights, both domestically and internationally, costs businesses and the economy billions of dollars every year.

In colonial America, each colony had intellectual property laws, but these were unenforceable outside the colony concerned. To address this issue, the U.S. Constitution granted the federal government authority over intellectual property and prevented the states from interfering. The next important stage in American intellectual property law occurred in 1834 when the U.S. Supreme Court ruled that works of writing could be protected. The Berne Convention of 1886 added international protection, and the length of time that copyrights are protected in America has now been extended in some cases to up to 70 years after the author has died.

Today there are three ways that intellectual property can be protected. Patents provide similar protections as the 1623 British law, and they must be registered. Trademarks protect logos and catchphrases while copyrights protect written work, software, music and film. Trademarks and copyrights do not have to be registered, and they are enforced by a use-based rule. When a dispute occurs, the parties involved must prove that they were the originator of the work in question in order to prevail.

If a fashion retailer, manufacturer or designer loses its trade secrets, the results can be devastating. Even with all the security measures companies may have in place to avoid a security breach, it’s a potential problem they still face. For example, several Nike designers who quit their jobs were recently suspected of taking the company’s trade secrets and revealing them to Adidas, their new employer. The scheme was eventually discovered by Nike and ended in an out-of-court settlement.

A fashion company’s trade secret consists of information that pertains to their product’s uniqueness and exclusiveness. Particularly, the trade secrets can be linked to the company’s cost data, manufacturing and design procedures, supplier and consumer lists and private marketing strategies, for instance.

To prepare for a possible breach of trade secrets, companies should rigorously execute the necessary procedures to protect their confidential information. This action may prove helpful in the event the company’s trade secrets are compromised and the company decides to seek protection in court.

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